The evolving landscape of NBFCs

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A REPORT

COVER STORY

The evolving landscape of

NBFCs

SPECIAL STORY

C-Suite Officers Broadening Horizon of India’s Financial Sector

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CONTENTS Cover Story

MAY - JUNE 2019

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08 The evolving landscape of NBFCs

Industry Perspective Indiabulls: Making Home Loans Journey Easier

40 RHF reduces the time of home

loan sanction to 7 minutes 16

NAFEES AHMED Chief Information Officer/ Group Head, Indiabulls Housing Finance Ltd.

‘Banks painting all NBFCs with same brush’

Delivery of Government Services’ 18

PEEYUSH KUMAR, Secretary, Finance Government of Andhra Pradesh

44 ‘Digital Media helps in delivering

targeted outcomes’ 20

P MUKHOPADHYAY GM-IT, REC

48 ‘PEGA’s Case Management

SUBRATA GUPTA Managing Director, NARBARD Financial Services Ltd.

‘MHFL Embracing technology to improve customer experience’

KUNAL DIXIT, Chief Technology Officer, Reliance Housing Finance Ltd.

42 ‘Andhra Pradesh Using IT for Last Mile

HARDIKA SHAH, Founder & Chief Executive Officer, Kinara Capital

‘Financial Gap between rich and poor needs to be bridged’

maximises efficiency of banks’ 22

SUMAN REDDY EADUNURI Managing Director, Pegasystems

Industry Speaks

PAVAN K. GUPTA Chief Executive Officer, Muthoot Housing Finance Company Ltd.

‘Making investments simpler helps investors take better decisions’

Conference Report

46 3 currencies that will 24

surprise investors OLYMP TRADE

ERIK HON, Managing Director, iFAST Financial India Pvt Ltd

Toolyt : Embracing Technology To Improve Sales Reps productivity

26

SUNIL YADAV Business Head, Toolyt

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EDITORIAL MAY - JUNE 2019

NBFC crisis and its implications for financial sector The Indian Banking and Financial sector is passing through a massive transformation phase like never before to facilitate an enriching experience for customers. Agile banking and the technology underpinning it is reshaping the finance industry.

The issue carries a cover story on ‘The evolving landscape of NBFCs’ where we have explored the current liquidity crisis in the sector and the steps taken by the Government and regulators to improve the liquidity issues of NBFCs after the IL&FS crisis. The story also explores what led to IL&FS crisis and what steps should be taken to avoid it in the future.

With changing technologies it has become mandatory for the organisations to hire C-Suite officers across the Banking and Financial Services and Insurance (BFSI) sector, to become the most dynamic in the world. According to the research, CXO recruitments have witnessed a massive growth in recent years, C-suite executives are expected to witness a 20-25 percent hike.

In this light, our special story, ‘C-Suite Officers Broadening Horizon of India’s Financial Sector’, explains the role of C-suite officers in enabling transformation and helping the sector to reinvent itself while broadening their horizon in the technology landscape.

The latest issue of The Banking and Finance Post also covers the interviews of top-notch banking experts giving their insightful views on the current financial scenario of the banking sector and their expectations from the new Government.

The key interviews in this issue are: Nafees Ahmed, Chief Information Officer, Indiabulls, Subrata Gupta, Managing Director, NABARD Financial Services Ltd, Pavan K. Gupta, Chief Executive Officer, Muthoot Housing Finance Company Ltd., Kunal Dixit, Chief Technology Officer, Reliance Housing Finance, Sunil Yadav, Head Of Business Development, Toolyt, Suman Reddy Eadunuri, Managing Director, Pegasystems, Hardika Shah, Kinara Capital Founder & Chief Executive Officer, P Mukhopadhyay, GM (IT), REC, Ministry of Power.

We have also brought out a conference report on the 6th NBFC100 Tech Summit Delhi, highlighting the future of Non-Banking Financial Companies (NBFCs) in today’s challenging time. The summit touched upon challenges and a future roadmap for NBFCs, Payment Banks, Small Finance Banks, Microfinance Institutions (MFIs), Housing Finance Institutions and many more.

The 7th NBFC100 Tech Summit, which will commence on 3rd July 2019, amalgamating leaders from across NBFCs, Micro Finance Institutions (MFIs), Housing Finance Institutions, Small Finance Banks and Payments Banks will emphasis on the financial landscape of Southern India.

With such a bouquet of special features, articles and interviews with top-notch banking experts, we hope our latest endeavour would evoke an invaluable response of our esteemed readers.

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Dr Ravi Gupta Editor-in-Chief The Banking & Finance Post Magazine and Founder Publisher and CEO, Elets Technomedia Pvt Ltd

COVER STORY

The evolving landscape of

NBFCs

Non-Banking Financial Companies (NBFCs) play a vital role in the Banking, Financial Services, and Insurance (BFSI) sector. However, the NBFCs have been in limelight post-IL&FS crisis. The flow of funds from NBFCs to the liquidity-starved real estate sector is expected to dry up further after DHFL’s recent downgrade.

Focusing on the liquidity flow and credit risk in the market, Anupama Mehra of Elets News Network (ENN) explores the current scenario of NBFCs.

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COVER STORY

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COVER STORY

I

t is not very old that Lehman Brothers filed for bankruptcy in September 2008 for a debt of USD 619 billion in the US. The investment bank has assets of worth USD 639 billion was the largest case of bankruptcy in US history. Lehman collapse had a chain reaction worldwide leading to an erosion of USD 10 trillion in the global market in October 2008.

Though the world is more globalized now and the best auditors and advisers are available in data, but we are also not learning from liquidity/ credit crisis/ history of other countries as well as from our own like Satyam computers, IL&FS and etc.

The financial irregularities in the case of IL&FS came to limelight last year when the company failed to fulfill short and long term obligations of more than Rs 90,000 crores. The writing on the wall is more clear now as the Essel group is on the brink, Dewan Housing Finance Corporation Ltd. (DHFL) has defaulted, Eros International is under water, Jet Airways is struggling to revive or already grounded. The Reliance Anil Dhirubhai Ambani Group (ADAG) group is fighting hard to survive but is unable to sell its assets.

So, we have NBFC crisis on one side and Public sector (PSU) banks have already seen a push to the wall due to the alarming rise of Non-performing assets (NPAs). As per the Q4 earning results of PSU banks the operating losses stand at over Rs 50,000 crores and with the defaulting of more and more companies the NPA position of the banks is going to worsen.

Bloomberg data shows that 35 companies of NIFTY have shown a jump in debt at Rs 16.3 Lakh crores that is a 13 percent rise on year-over-year (YOY). Only four companies of NIFTY are debt free, which is not a healthy sign of the economy.

Even though there is an improvement of the ranking of ease of doing business robustness of the economy, as per Medis report, but it appears that the financial crisis is building up day by day.

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To improve the liquidity condition, the RBI has infused Rs 27,500 crore into the financial system through bond purchases. RBI Governor Shaktikanta Das has also explained to relook into the regulations and supervision of non-bank lenders.

Experts across the sector opine that the common man (Mango man) is unable to react and getting crushed in the liquidity crisis due to mismanagement of strong hands.

“IL&FS doesn’t represent NBFC or Housing finance companies (HFC).

The crisis happened because of years of mismanagement. The model of IL&FS was an investment in infrastructures, projects like roads, bridges, highways, telecom. These projects will take 5-6 years and they will pay back in 20 years. They always had an asset-liability management (ALM) issue but if the ALM was a risk they would have gone worst many years ago. ALM and Liquidity are interlinked that is if you borrow short or long there will be a mismatch. But IL&FS never faced a liquidity issue. IL&FS suffered because many of their projects got delayed because of environmental issues, clearance from the forest, government and etc,” says Sunil Gupta, Chief Executive Officer, ManiBhavnam Home Finance during a conference organised by Elets Technomedia.

However, in the wake of IL&FS issue, the Government of India took immediate steps in October 2018 and took control of the company to arrest the spread of

contagion to the financial markets. A new board consisting of Kotak Mahindra Bank Managing Director, Uday Kotak and other experts in the field were constituted in place of the existing board.

Further, the Serious Fraud Investigation officer (SFIO) was assigned the job of investigation. It was reported in the media that management gave itself lavish salaries at the expense of public money. In the absence of adequate supervision by RBI or Shareholders or any claw-back provisions on remuneration, the management treated the company as its fiefdom.

The initial prober of SFIO has revealed that there were major lapses in Deloitte’s audit of IL&FS, also email trails has revealed deep-rooted connivance between former senior IL&FS officials and Siva Group Chairman as loan continued to be evergreened and recoveries delayed.

Top management of IL&FS had enjoyed foreign travels, private jets, booking of resorts, etc, as per the report. The charge sheet has been filed by SFIO in a special court in Mumbai and has accused 30 entities/ individuals of various violations under offenses.

Modifying credits and risks The massive fraud of IL&FS which has shaken the economy of the entire country did not happen in a day or two. It is a serious connivance of top management & auditors, and also ignorance of RBI. Many are blaming RBI for doing nothing decisive for the NBFC when it announced its policy on June 6, when almost ten months have passed of IL&FS issue. Though RBI doesn’t regulate Housing Finance companies as banks have significant exposure to HFC, RBI in any case as a mandate to look after the financial stability of the entire country.

However, RBI issued a new framework on June 7 for the resolution of stressed assets, replacing the controversial February 12, 2018 circular for a wider class of lenders. The new norms leave it to the discretion of lenders and give them 30 days to start working on a resolution plan from the day of default.

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COVER STORY

“The scenario has changed post -IL&FS crisis.

We are facing issues of liquidity from the bank’s side. The main challenge is of funding and on the operational side, managing the staff, you have done the policy, underwriting everything but if you don’t have an adequate staff it’s all going to fail.”

Sanjeev Yadav, Managing Director, Subhlakshmi Finance Pvt Ltd. The new framework will enhance liquidity and give a boost to interim finance to the market, experts feel.

“The market has become really tough, but Reserve Bank of India (RBI) as a regulator has done quite a bit of effort. They are trying to inject liquidity into the system, they have also provided the risk weightage for banks for lending to NBFCs and recently they have merged the categories of NBFCs which are asset financing, loan companies as well as investment companies into a single category. So, the regulator is taking steps but liquidity is a big challenge,” says V G Suchindran, Chief Financial Officer, Veritas Finance.

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this direction. In addition to the release of Rs 27,500 crore into the financial system through bond purchases, RBI Governor Shaktikanta Das has explained to relook into the regulations and supervision of non-bank lenders. Also, SEBI has tightened the rules for the credit rating agencies (CRAs) and has asked the entities to have a standardized operating procedure for tracking and recognizing defaults.

Though RBI is trying its best to inject liquidity, the NBFCs are facing issues from the bank’s side. “The scenario has changed post -IL&FS crisis. We are facing issues of liquidity from the bank’s side. The main challenge is of funding and on the operational side, managing the staff, you have done the policy, underwriting everything but if you don’t have an adequate staff it’s all going to fail,” says Sanjeev Yadav, Managing Director, Subhlakshmi Finance Pvt Ltd.

Further as declared by the former Governor of RBI Bimal Jalan, the government has appointed the Jalan committee on the issue of surplus funds with RBI, and they will submit the report by the end of June. With this fund, it is expected that Rs 1 to 3 lakh crores might be spared by the RBI for utilization by the government. It is hoped that with this fund the liquidity position will improve in the next two quarters.

In order to address the issue of liquidity crisis in totality, Government, RBI, SEBI (Securities and Exchange Board of India) has taken up a number of steps in

With the Government and regulators taking major steps to improve the liquidity in the NBFC sector, we hope that another IL&FS crisis won’t happen in the future 

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SPECIAL STORY

BROADENING FINANCIAL SECTOR Sustainability, in the digital era, is making it imperative for organisations to hire executives who are multitaskers and skilled to implement tech-based innovations rapidly. Better risk governance and solid strategies, especially in terms of technology are flagging off the need to appoint C-Suite Officers across the BFSI industry. Rashi Aditi Ghosh of Elets News Network (ENN) explores how CXOs are enabling transformation and helping the sector reinvent itself while broadening their horizon in the technology landscape.

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SPECIAL STORY

T

he Banking, Financial Services and Insurance (BFSI) sector in India is undergoing a massive transformation in alignment with technology. They are investing heavily on digital technologies in a bid to match the footsteps of leading global competitors offering a wide range and sophisticated products and services.

By embracing rapidly advancing technologies such as Artificial Intelligence (AI) and cognitive computing, India’s banks are preparing themselves to infuse efficiency and meet new challenges in the financial sector.

Growing Demand for C-Suite officers According to research reports, CXO recruitments have witnessed a massive growth in recent years. The overall demand for C-suite executives is expected to witness a 20-25 percent hike fuelled by growing demand for niche skill sets.

As per BTI Executive Search, which delivers 65-70 CXO hires per annum at compensation packages upwards of Rs 70 lakh-Rs 5 crore, for its customers, expects to see up to 60 percent YoY growth in demand for CXOs this year, driven by demand for niche skills sets.

What is C-Suite?

C-suite, or C-level, or CXO is widelyused term describing a cluster of a corporation’s most important senior executives. C-suite gets its name from the titles of top senior staffers, which tend to start with the letter C, for “chief,” as in chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), and chief information officer (CIO).

Explaining the role of Chief Technology Officers (CTOs) in the banking sector, V G Kannan, Chief Executive, Indian Banks’ Association during a conference organised by Elets Technomedia, said, “The role of Chief Technology Officers (CTOs) has become critical in the Banking, Connect with us on

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Financial Services and Insurance (BFSI) industry. Technology interface is bringing robust changes in the financial institutions.”

Why CXOs are Significant?

The new C-suite officers play a significant role as they allow companies to direct their attention towards specific strategic priorities.

Many of these new titles illustrate the key focus areas of a particular company. For example, after a serious data breach, a company may go out and hire a Chief Security Officer to show its investors and customers that this is an issue that the company is currently working on and believes it to be critical to its continued success.

Explaining the need to appoint CTO, a member of the C-Suite family, for technology advancement and efficiency, Shiv Kumar Bhasin, Former Chief Technology Officer, State Bank of India and CTO, National Stock Exchange, once said, “A CTO is significant in deciding technology theme or vision of the banking industry.”

“I believe that to transform the banking industry, appointing CTOs and completing their goal setting is very important. CTOs can help in setting up the bank as an open platform that can help consumers in enabling better banking options loaded with innovations,” he said.

What it takes to be a C-Suit offcers?

Reaching this high stratum typically demands a plethora of experience and finely-honed leadership skills. While many C-level operatives formerly depended on functional know-how and technical excellence to reach the top of corporate ladder, most have cultivated more visionary perspectives needed to make sound upper management decisions.

“The recent breakthrough in the power of digitalisation and technology within the BFSI sector has compelled The Banking and Finance Post

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one to reimaging the role of CXOs in an organisation. Being architects of comprehensive digital infrastructures in an organisation, CXOs today are working towards ensuring better access of essential services for their customers on digital platforms, “said Byju Joseph, Chief Technology Officer- Future Generali India Life Insurance.

“At Future Generali India Life Insurance Company, we are working towards increasingly becoming a technology-led financial service company, rather than just an insurance company with a technology division.

We believe in fostering relationships to nurture a culture that balances business mandates with digital initiatives. All our services are now designed to be cloud aware.

Furthermore, we have adopted a more ‘inclusive’ approach where instead of worrying about fintech start-ups, we are actively building bridges to leverage interdependent ecosystems of partners, suppliers, distributors and consumers,” he added.

Responsibilities at the C-Level C-level members work in concert to ensure that a company’s strategies and operations function in alignment with their established plans and policies.

With public companies, activities that don’t lean toward increased profits for shareholders are routinely corrected, under the purview of C-level management personnel.

Explaining the role of CXOs in driving the digital disruption, Butchi Babu Burra, Senior Domain Expert - IT, IDRBT said, “In the present scenario as far as public sector banks are a concern, I believe that CXOs are definitely the drivers of digital disruption.”

Talking about the role of Chief Information Officers (CIOs), in particular, Burra added, “The role of CIOs are not just limited to innovation but their role is now reinventing May - June 2019

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SPECIAL STORY

into Chief Information Business Officers. They are now significantly participating in ensuring technology innovation keeping its relevance in terms of business expansion and customer satisfaction.”

The evolving role of CXOs or C-Suite Officers is now helping the BFSI institutions in embracing technology innovations. These officers are assisting the banks in scaling up and meeting up the fast-changing demands of the millennials.

“A Chief Information Officer (CIO) or a CXO cannot be following the traditional rules in terms of bringing technological transformation. He has to think from the business point of view as well. Today, when we think about the implementation of new technology or disruptive technology, the dynamics change completely by the time we are actually implementing it in the organisation. It is important to increase the scale in the recent times and to do that it is significant to explore the entire population of the country,” said Nikhil Bandi, Senior Vice President & Chief Information Officer, Vistaar Financial Services.

Sunit Vakharia, Chief Information Officer, BOB Financial Solutions Ltd said,” It is true the CIOs are evolving and enabling innovation but in the global context this theory does not fit well. I came to know that one of the most advanced American banks’ board is now a tech-forward board. It means that every member of the board has to have a reasonable knowledge of technology to make your company stand against the plethora of FinTech advancements coming. It means that they are not worried about the banks, they are actually worried about the fintech companies.”

How Challenging is the Role a CXO? According to Harvard Business Review, requirements for all the C-level jobs have shifted toward business acumen and “softer” 14

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According to Harvard Business Review, requirements for all the C-level jobs have shifted toward business acumen and “softer” leadership skills. Technical skills are merely a starting point, the bare minimum. leadership skills. Technical skills are merely a starting point, the bare minimum. To thrive as a C-level executive, an individual needs to be a good communicator, a collaborator, and a strategic thinker. A CEO would now count on a CIO, for instance, to weigh in on a discussion about expansion into a new market and how the firm’s systems could support that expansion. What would the challenges be? What would be the long-term impact of the IT expenditures required to support the expansion? The CIO would be expected to provide answers to those questions.

“There is no tech-led innovation; it is either the organisation or the requirement of the customer that brings innovation. The time has come when CIOs are transitioning into Chief Information Business Officers.

In the next three-four years, it will be the CIOs who will be on the top of the domain. They will be actively involved in tech-ordinate business promotion.

If you look at the practices across the globe, you will find the most of the businesses are opting for tech-oriented business models,” said Srivaths Varadharajan, Chief Information Officer, Niyogin Fintech Ltd. CXOs and the Future of Marketing in Digital Era Chief Marketing Officer (CMO) Being an integral part of the CXO family, CMOs play a pivotal role in driving the sales and/or marketing strategies of a banking and financial institution. These executives are trained to manage social innovation and product development initiatives across both brick-and-mortar

establishments and electronic platforms—the latter of which is highly essential in today’s digital era.

“The role of marketing officers in the last five years has changed drastically.

It is no longer what it used to be.

Earlier marketing persons were not the leading persons but now they are on the driving seat. They actually engage the customers with your brand.

Today the customer is better-informed consumer and he can make smart choices. So how is this happening? It is happening because of the decisions made by Chief Marketing Officer,” said Dinesh Menon, Chief Marketing Officer, State Bank of India.

Explaining the role of marketing in today’s era, SVLN Nageswara Rao, General Manager, Digitisation & Marketing, Allahabad Bank said, “Marketing helps you stay connected with the branch. It keeps the customer aware pertaining to every recent update associated with the bank he has his account with. It has evolved and will keep evolving while keeping the customers’ requirements in mind.”

Conclusion Going forward, C-level executives will not only manage their own business areas in banking institutions; they will also be active members of the organisation’s senior leadership who offer advice to the CEO pertaining to key decisions. Based on the dynamically changing demands of the customers in today’s digital era, the CXO needs to be more team-oriented, capable of multitasking continuously and leading without rank, and able to resist stress. 

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INDUSTRY PERSPECTIVE

INDIABULLS

Making Home Loan Journey Easier Indiabulls enabled online loan application processing to 24*7 over various platforms, allowing customers to take loans anytime anywhere. It is first of its kind in today’s financial market, says Nafees Ahmed, CIO, Indiabulls in conversation with Anupama Mehra of Elets News Network (ENN).

NAFEES AHMED, CIO, Indiabulls in conversation

Indiabulls is known as the key ‘change instigator’. Give us an overview of your products and services?

We started our digital journey in 2016 with our e-home loan product, which was one of its kind and no one has launched it even today in the Indian market. One and a half years back we launched our personal loan mobile app called Dhani.

Before the Supreme Court’s order, we were allowed to do e-KYC and e-sign using the Aadhar facility. So, the customer was able to get personal loan at the end 16

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of the journey on a real-time basis. It was without any physical contact with the customer. It was a three-minute journey where the loan amount would get transferred to the customer’s account as soon as they complete their loan application on smart phone.

I have seen people taking a loan at 2 am in the morning, on weekends, on holidays, we made it very convenient for the customers to get loans as and when they required.

We focused mainly on digital platforms like social media etc. to promote our Dhani app instead of print or electronic media. We realised that social media platforms are most effective, so all our marketing campaigns are based on digital platforms as today’s customer is spending most of their time on these platforms.

When your customers are on the digital platform and you are not interacting with them in a physical world then you need all the data

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INDUSTRY PERSPECTIVE

required for loan disbursement in digital form. Using this data you need to understand the customer behaviour, his creditworthiness, how much loan you can give to the customer at what rate and tenure and customer’s intent to pay back the loan. You also need to make sure, by analysing this data, that it’s not fradulent and once you are disbursing the loan to that customer, you have a fair chance of getting the money back.

For that, we need to collect the data from as many sources as possible, we get the financial data of the customer directly from the sources. Ffor example, we are getting the customer bank statement directly from the bank so earlier in the physical world what used to happen was that the customer used to give the hard copy of the bank statement and there were chances of fraud. So we had to engage our fraud control department or external agencies to check the authenticity of the data, whereas now we are getting the ITR data, bank data and credit bureau score. All this financial data directly from the sources.

What are the challenges you faced during your digital journey so far?

Earlier our systems/applications were used by our employees only to process the loan application as all the information was submitted by customers in physical documents and we used to punch the data in the system. Now in the digital world, where all the stakeholders, be it, my customers, employees, third-party agencies, partners, are directly connected to my systems, to fetch or submit the data.

So, security becomes a big concern as cyber security risks grow manifold. We have a dedicated information and security team, to make sure that we are protected from cybersecurity threats. We are ISO 27001 Certified, which means we have the best practices implemented and using advanced technologies in the information security field to secure our systems.

Since now our systems are open to the world we are being extra careful when it comes to security.

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Three technologies which you feel are a must for any financial companies?

Artificial Intelligence (AI), analytics and Robotic process automation (RPA) are the three major technologies.

Earlier, for an underwriter, it used to take hours to compile data and analyze it, to decide the creditworthiness of the customer. Now it is completely automatic. Now we have implemented AI to underwrite the loan so all this data is sent to this engine and it generates the offer without any manual intervention. It has improved the turnaround time to disburse a loan from a couple of days to three minutes for a personal loan.

If you are not connecting to your customer in the physical world and you are taking your decision on the basis of the data you have collected you can’t do anything without AI and analytics that is given.

About RPA, we didn’t have that bandwidth earlier but this year we are working on it.

There are certain use cases, we have identified in our system where we can implement RPA to improve the efficiency of our employees. For example, we are processing a hundred thousand applications per day, there are still some teams like operations, credit, and collections, where you can’t do everything 100 percent digitally and manual processing is involved in certain cases. So, now we need to implement RPA to get efficiency from these people otherwise they will become the bottleneck in the system or the cost would become very high to run these departments. As we are planning to increase our business manifold, we need to make sure that we get the highest efficiency by implementing technologies like RPA. As all our processes are digital focused, and interactions between various stakeholders are happening digitally, The Banking and Finance Post

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we are generating huge data including customer related unstructured data in the process. We strongly feel that in today’s digital world, data is the most critical factor for your business success/growth. Data analytics is the core function of our business as all decisions, like refining the existing products, new product development, processes improvements, etc are data-driven. Traditional analytical tools are good for structured data but to monetize the unstructured data collected from social media and other alternative sources we need to implement solutions around big data in the next phase.

The Prime Minister has launched digital India during his last tenure. What are your expectations from Modi 2.0?

Digital India solution stack was the root of all the innovations did during the last 4-5 years, and we were the market disruptors by using these initiatives innovatively, started by the Government of India. E-sign facility, e-KYC facility, e-mandate, digital payments, etc. all are very important for us and for good customer experience. So I am expecting that the government will take these initiatives more aggressively this time to make true digital INDIA for inclusive growth of all sections of the society.

What are your plans for the rest of 2019?

We are getting into the insurance business life as well as general. Again our focus is to develop complete digital platforms for our customers, which should give them one of the best experiences to interact with us. We understand that in today’s digital world usage of technologies like AI, analytics, RPA, etc is given and we need to develop a culture of innovation in the organisation to get to the next level. We know we are competing with fin-tech companies and adopting the latest technologies are must, not only for your growth but even for survival. 

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INDUSTRY PERSPECTIVE

'BANKS PAINTING

all NBFCs with same brush' The government should insist banks on keeping funds aside for small and midsized NBFCs to avoid another crisis. Banks must differentiate between the NBFCs and should qualify the stronger NBFCs, says Hardika Shah, Founder & CEO, Kinara Capital, in an interview with Elets News Network (ENN). job sustenance, and new job creation, especially for women and first-time earners. To date, we have disbursed Rs.1,160 crores across 34,000+ loans.

HARDIKA SHAH Founder & CEO, Kinara Capital

Give us an overview of your products and services.

Kinara Capital transforms lives, livelihoods and local economies by providing fast and flexible loans without property collateral to the underserved Micro, Small & Medium Enterprises (MSMEs) in India. We offer loans in the range of Rs.2-25 lakhs for working capital, asset purchase, line of credit and other business expansion needs. By not taking any property collateral, we have extended financial inclusion to many MSMEs in the informal sector. Almost half of our customers are new to credit and to formal lending. Kinara Capital’s on an average have reported a 20 percent increase in their business income from the entrepreneurs who have taken loans from us. As a result of our services, Kinara Capital has impacted over half a million lives in India with income generation, 18

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There is a liquidity crisis in the market after IL&FS. What steps do you feel the government should take to improve it?

The Government has initiated steps to ease the liquidity in the system and rate cuts have been given to the banks. The government has infused Rs 40,000 crores in public sector banks to provide a boost to all sectors that have been gripped by a slowdown. However, the banks are still not lending to non-banking financial companies (NBFCs) because they are painting all NBFCs with the same brush.

We have a vast and mixed economy in India and NBFCs play a critical role in driving economic growth. The government should insist banks to keep some portion of funds aside for small and midsized NBFCs to avoid another crisis. Banks must differentiate between the NBFCs and should qualify the stronger NBFCs, perhaps by reviewing parameters like whether Reserve Bank of India (RBI), has qualified the NBFC as systemically important or not along with the NBFC’s profitability, overall growth, and portfolio quality.

Kinara has raised $14.2 million from private equity. What new investments are you looking forward to?

We have always raised funds as needed for our business plan. As a company, we believe in sustainable growth and, therefore, we hit profitability within four years of our inception. Our strategic

approach has meant that we are one of the NBFCs not to have suffered from the liquidity crunch. This year, we are happy with the vote of confidence from our investors who doubled-down and have invested in our growth at a time when the NBFC industry has been struggling.

RBI has framed guidelines for NBFCs recently. How is it going to change the current financial situation of NBFCs? The recent moves by RBI is a good thing for the long term viability of the ecosystem. As per the new RBI proposal, NBFCs that need to increase their capital adequacy will find investors to back them if they have a strong business model and have demonstrated financial sustainability. For the NBFCs who are on the cusp, RBI is giving them ample time to push for scalability. It is time to sink or swim for NBFCs with low capitalisation to either pivot their business models or find the investors who believe in their vision.

What new innovations are you planning for the next five years?

Five years is a long way away but we do plan to grow in our existing regions and expansion into new regions. We are one of the few financial services companies that have a majority women-led management team, so we are very motivated to bridge the financial inclusion gap for women entrepreneurs. In the short-term, we are working on new services and products specifically tailored to support women entrepreneurs. We want to mobilise women entrepreneurs by providing incentivised loan products and services. 

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Knowledge Partner

‘The Maharashtra State Coop Cotton Growers Marketing Federation Ltd (MSCCGMF)’

Government of Maharashtra

Organiser

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Cotton & Agro Commodities

‘The Maharashtra State Coop Cotton Growers Marketing Federation Ltd (MSCCGMF)’

Government of Maharashtra

Host Partners Government of Maharashtra

‘The Maharashtra State Coop Cotton Growers Marketing Federation Ltd (MSCCGMF)’

Government of Maharashtra

‘The Maharashtra State Coop Cotton Growers Marketing

Cotton & Agro Commodities Cotton & Agro Commodities

Federation Ltd (MSCCGMF)’ Innovation in Cotton and Agro Commodity Markets

C O N F EGovernment REN C E I of Maharashtra

AW A R DState S CoopI E X P O ‘The Maharashtra Cotton Growers Marketing Cotton & Agro Commodities Federation Ltd (MSCCGMF)’ MUMBAI, 15 July 2019

Innovation in Cotton and Agro Commodity Markets CON F EREN C E

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SHRI DEVENDRA FADNAVIS C O N F E R E N C E I A W A R D S I E X P O MUMBAI, 15 July 2019 Innovation in Cotton and Agro Commodity Markets Hon’ble Chief Minister

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Innovation in Cotton and Agro Commodity Markets MUMBAI, 15 July 2019 SHRI DEVENDRA FADNAVIS Hon’ble Chief Minister Maharashtra

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SHRI DEVENDRA FADNAVIS

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Hon’ble Chief Minister Maharashtra

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SHRI DEVENDRA FADNAVISSHRI RAM SHINDE

Chief Guest

Hon’ble Minister for Marketing & Textiles Hon’ble Chief Minister Government of Maharashtra Maharashtra

Guest of Honour SHRI DEVENDRA FADNAVIS SHRI RAM SHINDE Hon’ble Chief Minister Maharashtra

Guest of Honour

Hon’ble Minister for Marketing & Textiles Government of Maharashtra

VASHISHTH Joint secretary Department of Food and SURESH KUMAR Public Distribution VASHISHTH Government of India Joint secretary SURESH KUMAR Department of Food and VASHISHTH Public Distribution Joint secretary Government of India SURESH KUMAR Department of Food and VASHISHTH Public Distribution Joint secretary Government of India SURESH KUMAR Department of Food and RAMAKANT VASHISHTH Public Distribution Joint secretary PANDEY Government of India Department of Food and Director Public Distribution Agricultural Marketing RAMAKANT Government India Board , UttarofPradesh PANDEY Director RAMAKANT Agricultural Marketing PANDEY Board , Uttar Pradesh Director RAMAKANT Agricultural Marketing PANDEY Board , Uttar Pradesh Director RAMAKANT Agricultural Marketing VIRENDER PANDEY SINGH Board , Uttar Pradesh Senior Marketing Officer Director HP State Agricultural Agricultural Marketing Marketing Board Board , Uttar Pradesh VIRENDER SINGH Senior Marketing Officer HP State Agricultural VIRENDER SINGH Marketing Board Senior Marketing Officer HP State Agricultural VIRENDER Board SINGH Marketing Senior Marketing Officer HP State Agricultural VIRENDER SINGH Marketing Board Senior Marketing Officer HP State Agricultural Marketing Board

Special Guest

Hon’ble Minister of State Agriculture Government of Maharashtra

SHRI SADABHAU KHOT

Special Guest

Hon’ble Minister of State Agriculture Government of Maharashtra

SHRI SADABHAU KHOT

Special Guest

Hon’ble Minister of State Agriculture Government of Maharashtra

SHRI RAM SHINDE PROGRAM MENTOR

Hon’ble Minister of State Agriculture CHAIR Government of PROGRAM Maharashtra

Guest of Honour

AJOY MEHTA Chief Secretary Government of Maharashtra AJOY MEHTA Chief Secretary Government of Maharashtra AJOY MEHTA Chief Secretary Government of Maharashtra AJOY MEHTA Chief Secretary SURESHGovernment KUMAR of Maharashtra

Special Guest

Government of Maharashtra

SHRI SADABHAU KHOT

SHRI RAM SHINDE

Hon’ble Minister for Marketing & Textiles Government of Maharashtra AJOY MEHTA Chief Secretary Government of Maharashtra

SHRI SADABHAU KHOT

MUMBAI, 15 July 2019 Hon’ble Minister of State Agriculture

Guest of Honour

Hon’ble Minister for Marketing & Textiles ANOOP KUMAR Government of Maharashtra Principal Secretary

SHRI RAM SHINDE

Co-operative and Marketing, Animal Husbandry Hon’ble Minister for Marketing & Textiles PROGRAM MENTOR Dairy Development & Fisheries Government of Maharashtra ANOOP KUMAR

Government of Maharashtra Principal Secretary PROGRAM MENTOR Co-operative and Marketing, Animal Husbandry ANOOP KUMAR & Fisheries Dairy Development Principal Secretary Government of Maharashtra PROGRAM MENTOR Co-operative and Marketing, Animal Husbandry ANOOP KUMAR & Fisheries Dairy Development Principal Secretary Government of Maharashtra PROGRAM MENTOR Co-operative and Marketing, Animal Husbandry ANOOP KUMAR & Fisheries Dairy Development Principal Secretary Government of Maharashtra Co-operative and Marketing, Animal Husbandry DR N NAGAMBIKA PANDURANG POLE Dairy Development & Fisheries Secretary DEVI Government of Maharashtra Department of Food, Principal Secretary

KEY SPEAKERS KEY SPEAKERS KEY SPEAKERS KEY SPEAKERS KEY SPEAKERS

SHRI SADABHAU KHOT

NAWIN SONA NATESAN Secretary and Managing Director The Maharashtra State Coop PROGRAM CHAIR Cotton Growers Marketing NAWIN SONA NATESAN Federation Limited Secretary and Managing Director PROGRAM CHAIR The Maharashtra State Coop NAWINGrowers SONA NATESAN Cotton Marketing Secretary and Managing Director Federation Limited PROGRAM CHAIR The Maharashtra State Coop NAWINGrowers SONA NATESAN Cotton Marketing Secretary and Managing Director Federation Limited PROGRAM CHAIR The Maharashtra State Coop NAWIN SONA NATESAN Cotton Growers Marketing Secretary and Managing Director Federation Limited The Maharashtra State Coop DR NIRAJ KUMAR Cotton Growers Marketing PAWAN Federation Limited Registrar of Cooperative

Civil Supplies & Co-operation Department DR N NAGAMBIKA PANDURANG POLE Consumer Affairs Government of Karnataka Secretary DEVI Government of Jammu Department of Food, Principal Secretary & Kashmir DR N NAGAMBIKA PANDURANG Civil Supplies POLE & Co-operation Department Secretary Affairs DEVI Consumer Government of Karnataka Department of Food, Principal Secretary Government of Jammu DR N NAGAMBIKA PANDURANG Civil Supplies POLE & Co-operation Department & Kashmir Secretary DEVI Consumer Affairs Government of Karnataka Department of Food, Principal Secretary Government Jammu DR N NAGAMBIKA PANDURANGof POLE Civil Supplies & Co-operation Department & Kashmir Secretary ARUN HIMANSHU DEVI KUMAR Consumer AffGOYAL airs Government of Karnataka Department of Food, India Business Leader Principal Secretary SRIVASTAVA Government of Jammu Civil Supplies Weather&Company Co-operation Department Managing Director &The Kashmir Consumer Affairs An IBM Business Government of Karnataka Central Warehousing ARUN KUMAR HIMANSHU of GOYAL Government Jammu Corporation Business Leader SRIVASTAVA &India Kashmir The Weather Company Managing Director HIMANSHU GOYAL ARUN KUMAR An IBM Business Central Warehousing India Business Leader SRIVASTAVA Corporation The Weather Company Managing Director ARUN KUMAR HIMANSHU GOYAL An IBM Business Central Warehousing India Business Leader SRIVASTAVA Corporation The Weather Company Managing Director ARUN KUMAR HIMANSHU GOYAL An IBM Business Central Warehousing Business Leader UIndia D SHIRSALKAR GURVRINDER SRIVASTAVA PAL Corporation The Weather Company Chief General Manager Managing Director SINGH RANDHAWA An IBM Business NABARD Central Warehousing General Manager Corporation Punjab State GURVRINDER PAL U D SHIRSALKAR Agriculture Marketing Chief General Manager SINGH RANDHAWA Board NABARD General Manager GURVRINDER PAL U D SHIRSALKAR Punjab State Chief General Manager SINGH RANDHAWA Agriculture Marketing NABARD General Manager Board GURVRINDER U D SHIRSALKAR Punjab State PAL Chief General Manager SINGH RANDHAWA Agriculture Marketing NABARD General Manager Board GURVRINDER PAL U D SHIRSALKAR Punjab State Chief General Manager SINGH RANDHAWA Agriculture Marketing NABARD General Manager Board Punjab State #EletscommoditymarketingAgriculture | event.eletsonline.com/marketing-agro-commodities-market/ Marketing Board

Societies, Cooperative DR NIRAJ KUMAR Department PAWAN Government of Rajasthan Registrar of Cooperative DR NIRAJ Cooperative KUMAR Societies, PAWAN Department Registrar of Cooperative Government of Rajasthan DR NIRAJ Cooperative KUMAR Societies, PAWAN Department Registrar of Cooperative Government of Rajasthan DR NIRAJ KUMAR Societies, Cooperative PAWAN NIRMAL ADHIKARI Department Registrar ofSecretary Cooperative Additional Government of Rajasthan Societies, Cooperative Registrar of Cooperative

Department Societies, NIRMAL ADHIKARI Government Government of of Rajasthan Tripura & Additional Secretary Managing Director, Registrar of Cooperative Tripura Development NIRMALTea ADHIKARI Societies, Board Additional Secretary Government of Tripura & Registrar of Cooperative Managing Director, NIRMAL ADHIKARI Societies, Tripura Tea Development Additional Secretary Government of Tripura & Board Registrar of Cooperative Managing Director, NIRMAL ADHIKARI Societies, Tripura Tea Development Additional Secretary Government of Tripura & Board Registrar of Cooperative Managing Director, Societies, Tripura Tea Development Government of Tripura & Board Managing Director, Tripura Tea Development Board

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INDUSTRY PERSPECTIVE

'FINANCIAL GAP

between rich and poor needs to be bridged' NABFINS is working on bridging the gap between the rich and the poor. It is a challenge and NABFINS is trying to help people by giving credit. However, this is neither a one institution’s job nor a fight against poverty to be over in a day, says Subrata Gupta, Managing Director, NABARD Financial Services Ltd. in conversation with Elets News Network (ENN). send money to my daughter, it’s just a few clicks on the mobile and money is there in her account! Thanks to digitization and products like Immediate Payment Service (IMPS).

I remember in 1985, when I joined NABARD, I would take permission from my superior to go to the bank to withdraw the salary which generally took somewhere between 1-2 hours or even more specially if it was a Monday.

SUBRATA GUPTA Managing Director, NABARD Financial Services Ltd.

You have been part of NABARD since 1985. What changes have you seen in terms of technology over the period of time?

If I start from what it was in 1985 and what it is now, it’s a sea change which perhaps today’s younger generation will not be able to fathom. I will give two examples which will indicate the kind of change technology has brought in the banking sector. I still remember my father sending me money when I was in hostel from Kolkata to Ahmedabad. In those days such instruments were called upcountry instruments/ cheque. It would take at least 15 days for the bank to give credit to my account. Today when I 20

May - June 2019

We would draw money based on our estimate for the month in one go to avoid coming back again and going through the torture. And this was in a city like Mumbai. Today, I suddenly find myself in an awkward position if somebody asks for cash from me because either I don’t have the requisite change or I don’t have enough cash in my purse! Payment systems have changed so much that we cannot even fathom how easy our life has become.

Prior to this you were handling the Department of Financial Inclusion and Banking Technology of NABARD. How exciting or challenging is your new role with NABFINS? From Banking technology I have moved over to Micro-finance. It’s a big change and to be frank it has been a great learning and unlearning experience.

The Pradhan Mantri Jan Dhan Yojana (PMJDY), one of the biggest financial inclusion initiatives in the world, has helped several households to get an account through which they can now do transaction as well as savings in a secure manner. I wish every eligible person has his/her own bank account and the same is linked to the various government schemes relating to insurance and pension.

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NABFINS works deep inside in rural areas where many of the technological developments we are talking about is not of much interest. The business of micro-finance is done by NABFINS which caters to providing financial services to the poor.

And this goes with our motto of “Balancing Business with Inclusion”. Even today deep inside Madhya Pradesh, there are groups who find it tough to take a loan of Rs 5000 per member, which many of us spend probably in one evening when we go out with our family to see a movie.

Bridging this gap is a challenge which we have to work on and NABFINS tries to help such people by giving credit. I can proudly say that NABFINS gives credit at the lowest rate in the Microfinance sector. However, this is not a one institution’s job nor is fight against such poverty to be over in a day.

You have spearheaded the entire Connect with us on

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project of implementing the core banking solutions across 201 District Co-operative Banks and State Co-operative Banks across 16 states and 3 union territories.

What are the new projects you are currently working on?

NABARD did implement core banking solutions (CBS) in more than two hundred banks and the project is in its second term. NABARD did an action research project titled “Comprehensive Financial Inclusion” through five pilots in five regions which, based on the videos available on YouTube, shows the huge gap which still exists in financial inclusion if we only take the basics like Savings, Credit, Insurance, pension and payments. It also clearly brings out an approach which can be adopted for taking Financial Inclusion to the doorstep of every household in India. It also points out clearly to the gap which exists between urban and rural India. The Pradhan Mantri Jan The Banking and Finance Post

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Dhan Yojana (PMJDY), one of the biggest financial inclusion initiatives in the world, has helped several households to get an account through which they can now do transaction as well as savings in a secure manner.

I wish every eligible person has his/ her own bank account and the same is linked to the various government schemes relating to insurance and pension. This gap needs to be bridged.

How the present Government will impact the working role of NABARD Financial Services and other similar financial institutions?

The newly elected Government, I expect, will have a positive impact in the functioning of MFIs. Present government believes in direct benefit transfer rather than things like loan waiver which is good for the banking industry as such. I am sure Financial Inclusion will also get a boost under the present regime.  May - June 2019

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INDUSTRY PERSPECTIVE

MHFL EMBRACING

technology to improve customer experience The use of technology is helping Affordable Housing Finance Companies to customize credit assessment models and optimise business processes, thereby reducing the time to market and helping to improve the customer experience, says Pavan K. Gupta, CEO, Muthoot Housing Finance Company Limited, in conversation with Elets News Network (ENN). segments account for 95 percent of the total housing shortage in India. MHFL customers primarily belong to the EWS and LIG segment and loans are given for the purchase of home, self-construction, extension and repair and renovation.

PAVAN K. GUPTA CEO, Muthoot Housing Finance Company Limited

How is Muthoot Housing finance Company Ltd.(MHFL) catering to the demands of customers who are not addressed by the formal banking sector?

Muthoot Housing Finance Company Ltd. (MHFL) caters to the housing finance needs of the common man who generally do not get home loans from banks and large HFCs. MHFL is a pure play affordable housing finance company giving a maximum home loan of Rs 25 lakhs to salaried and self-employed with formal or informal income sources. According to the Ministry of Housing, Urban Poverty Alleviation, the Economically Weaker Section (EWS) and Low-Income Group (LIG) 22

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MHFL has developed expertise in understanding customer home loan needs and accessing their income from informal income sources. Evaluation of property from a legal and technical perspective, customer business and cash flows is done by in house team.

This is done by MHFL team who visit customers’ business, residence and property being purchased.

The housing finance in India is booming. What is the reason behind it?

There is a huge shortage of housing in urban and rural India. In 2015, with a vision to provide a home to every Indian, the Government launched “Housing for All” by 2022 scheme. Under the Pradhan Mantri Awas Yojna (PMAY), the government plans to provide 20 million houses in urban areas and 30 million houses in the rural areas.

The government has implemented various initiatives to boost the demand for affordable housing like the reduction of Goods and Service Tax (GST) to 1 percent for affordable housing, infra status to affordable housing, tax holiday to affordable housing developers for

five years, allowing external commercial borrowing for affordable housing, Credit Linked Subsidy Scheme (CLSS) subsidy in the urban areas and subsidy support for beneficiary lead construction. All these measures have led to a huge demand and supply of affordable homes resulting in a boom in the housing finance market.

National Housing Bank (NHB) also issued around 38 new licences in the last three years to start Housing Finance Companies (HFCs) which primarily provide finance to customers in the EWS and LIG segment buying affordable homes.

What are your expectations with the Narendra Modi’s government for the growth of the affordable housing sector in India?

The Narendra Modi’s government has come up with several tax sops to boost the housing demand during the interim budget presented in February 2019.

With him coming back to power, we expect the budget in July 2019 to be announced in favour of the housing sector in India.

Some of the expectations from the upcoming budget are: • To open avenues to raise long term funds for HFC’s to reduce the asset liability mismatch • Rationalisation of high registration

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INDUSTRY PERSPECTIVE

• • •

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cost and standardisation of property registration cost across India.

Long term capital gain tax to be withdrawn , which will give much needed boost to foreign investment Simplification of corporate tax code and rationalisation of GST rates Considering that inflation is under control prudent steps should be taken to promote consumption by rationalising direct tax and ensuring more disposable income in hands of consumer Govt to propose steps to ease the liquidity pressures in the market specifically for HFC’s/NBFC’s and relaxation of tax under section 43 (D) of IT Act (relating to booking of NPAs – moving from accrual to realized)

In the interim Budget presented in February 2019, the government has proposed: Connect with us on

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Full income tax rebate to those with net taxable income up to Rs 5 lakh.

This will result in more disposable income for the common man.

Individuals who own up to two selfoccupied properties do not have to pay any notional rent tax on second home .

The tax deducted at source (TDS) threshold for deduction of tax on rent has been proposed to increase from Rs 1,80,000 to Rs 2,40,000.

Rollover of capital gains up to Rs 2 crore towards buying (investing) in two houses compared to one unit only.

For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is extended for one more year to the housing projects approved till March 31, 2020.

Exemption on levy of tax -- on notional rent related to unsold

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properties -- to 2 years from the date of project completion, compared to just one year under present norms.

How significant is the role of technology in the growth of housing finance in India?

Affordable Housing Finance Companies (AHFCs) are catering to low-income, urban/semi-urban customers in unorganised sectors. The use of technology is helping AHFCs customize credit assessment models and optimise business processes, thereby reducing the time to market and helping to improve the customer experience. It has made business operations and expansion much easier at a lower cost and helps in better utilisation of the available assets and manpower/resources. Data analytics using technology is helping to identify the right customers and managing delinquencies better.  May - June 2019

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INDUSTRY PERSPECTIVE

‘MAKING INVESTMENTS

simpler helps investors take better decisions’ industry by providing online transactions, a wide range of funds, transparent charging structure, comprehensive research and tools for funds analysis and comparison, educating investors with expert content and halving the sales charge.

ERIK HON Managing Director, iFAST Financial India Pvt Ltd

We provided the transparent solutions to the investors in India which in-turn helped them to make better decisions, says Erik Hon, Managing Director, iFAST Financial India Pvt Ltd, in an Interview with Arpit Gupta of Elets News Network (ENN).

How is it to be part of one of the Asia’s largest wealth management FinTech?

The size and position that the iFAST Group has achieved in Asia today is a very strong validation of our belief in making investments simple, transparent, and accessible to investors, and empowering them to take better and informed decisions.

We started in the year 2000 as a B2C online investment portal in Singapore during the dot com bubble, before the term ‘FinTech’ was even coined.

We disrupted the mutual fund distribution 24

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In 2002, the Monetary Authority of Singapore, the financial services regulator, legislated the Financial Adviser Act which gave birth to a new financial intermediary that can be independent and not tied to any product manufacturer. Our focus on transparency, investor education and research driven solutions at that time helped to establish our market leading position in both B2C and B2B channels in Asia today.

We came to India in the year 2008 with the same belief and business model.

Give us an overview of your flagship products and services.

India desperately needs more professional investment advisers – we have just over 1,20,000 mutual fund distributors, and just over a 1000 SEBI Registered Investment Advisers (RIA) for 1.3 billion people.

In this context, iFAST Financial India’s portfolio of solutions addresses an adviser’s business journey at multiple touch points: 1. Growth for the professional adviser: Our proprietary iFAST WRAP platform offers feebased advisers a comprehensive and seamless solution that includes capabilities and services for multi-asset financial planning, active portfolio management, automated fee recovery, compliance and research support, and more.

2. Transformation for advisers/ distributors: Our non-WRAP platform is for commissions-based mutual fund distributors who are looking to transform into fee-based advisers. This is a completely digital execution platform, with built-in support for research, compliance, reporting and more.

Our other offering for this segment is the RIA Network, which is India’s only RIA incubation service, with end-to-end support for licensing, compliance and marketing in the early stages of an adviser’s fee-based business.

3. Succession for all advisers: The IFA Marketplace is India’s only exchange for the buying, selling and merging of advisory practices. By aggregating services for networking, identifying potential collaborations and business valuation, we hope to make retirement or inorganic growth a less challenging proposition for advisers.

What are the major technologies you are deploying in your company?

We are working towards enabling Robo Advisory services with direct plans to help advisers provide low-cost automated online advisory services. This is in line with our focus on helping advisers to acquire and manage more clients efficiently and deliver world-class wealth management services to grow the business.

What are the new innovations your company is looking forward to introduce this year?

We want to make the “jugaad” solution less attractive not in terms of cost, but in terms of convenience and business growth.

Fixed income, especially the bond market, has been largely inaccessible to retail investors in India. Last year, we became one of only two Indian platforms enabling online access to corporate fixed deposits (CDs), and also enabled online purchase/bidding of NCDs and G-Sec Bonds. We are continuing our thrust in this area, and are working on an OTC Exchange for Corporate Bonds in Asia.

Our other area of focus is Exchange Traded Funds (ETFs). Our strategy is to drive retail ETF volumes through fee-based financial advisers on our platform, and focus on providing liquidity on a few large-cap ETFs that already outperform actively managed large cap funds. 

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INDUSTRY PERSPECTIVE

TOOLYT:

Embracing Technology to Improve Sales Reps’ Productivity India ranks third in the South-East Asia market on readiness with technology like AI and ML. Current dynamism and trust towards innovations are making it tough for companies to get completely automated, but it’s changing at a good pace, says Sunil Yadav, Business Head, Toolyt, in an interview with Elets News Network (ENN).

SUNIL YADAV Business Head, Toolyt

Give us an overview of your products and services Toolyt is an Artificial Intelligence (AI)based personal assistant for the field sales representatives which helps them to focus on leads, customer and Key Performance Indicators (KPIs) to achieve the desired targets. Toolyt uses Mobility, Gamification, AI, and Machine Learning (ML) to improve the productivity of the field sales representatives. It consumes data from third-party enterprise applications on a real-time basis to generate and deliver actionable insights for the sales representatives.

It automatically detects the patterns of the sales representatives and 26

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recommends the best next action items as per the KPI. Our one of the core features, Peer to Peer learning helps to maintain the standardization of best sales practices across the sales team.

Companies like GE Healthcare, SK Finance, Puro Wellness, and Ion Exchange have seen tremendous growth in productivity and sales data visibility.

What are the challenges you faced in the execution of the digital project?

Please highlight a couple of them?

During our implementation at SK Finance, we had a major challenge of increasing productivity, adoption and data visibility. In just four weeks, Toolyt was able to demonstrate the increment in productivity through KPI based tracking, Adoption through features like AI and Geo-intelligence and data visibility through seamless Application Programming Interface (API) integration.

How do you rate India readiness to technology like AI, ML? And what are the technologies you are using for your services?

India ranks third in the South-east Asia market on readiness with technology like AI and ML. Current dynamism and trust towards innovations are making it tough for companies to get completely automated, but I’m sure it’s changing at a

good pace. Startups have adopted AI and ML quickly than an enterprise company, which is very promising.

We’ve built our own platform which is AI and ML enabled, due to APIs, Toolyt can get integrated with any of the third party enterprise applications.

We’ve successfully done the integration with SAP, sales force, Oracle and Zoho books and have readily available plugins.

Technology is changing rapidly so is the risk quotient. How are you expanding your offerings in alignment with this?

Though it’s very costly, we only partner with tested technology, for Maps we are using Google Maps, for data storage we are using AWS Cloud which is RBI compliant. Our existing clients include GE Healthcare, which has one of the best due diligence teams across the globe. This itself proves a lot.

What innovations have you planned for the rest of 2019?

We are actively working on making the user interface more better and smarter.

Sales representative using Toolyt should spend more with customers, not with Toolyt App. Our plans are to increase AI-based 300 KPIs and suggestions by 2x which are created especially for Non-banking Financial Companies, Bank and Insurance companies. 

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Underlining Opportunities for NBFCs, Looking Beyond Challenging Times

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ndia is different and so are the challenges faced by the NBFCs here. In tough times, there is a need to reflect and think beyond, said Dr Amitabh Rajan, Chairman, Reserve Bank of India Services Board, at the inauguration of the 6th NBFC100 Tech Summit held recently in New Delhi.

The conclave was organised by, Elets Technomedia in association with The Banking & Finance Post, Asia and the Middle East’s premier bi-monthly magazine, being the Knowledge Partner.

The first session titled, “Non Banking Financial Company: An Opportunity in a Storm” began with a deliberation by Dr Rajan, who highlighted the ongoing challenges faced by the Non-Banking Financial Companies (NBFCs) in India, role of media during the tough times and the way forward.

On this occasion, P Satish, Executive Director, Sa-Dhan, a microfinance institution and one of the host partners of the conclave, spoke about the transition of NBFCs and Microfinance Institutions (MFIs) over the years.

He also explained the role of regulatory bodies in ensuring the emergence of MFIs as lending institutions.

Raman Aggarwal, Chairman at the Finance Industry Development Council (Host Partner of the conclave) underlined the role of regulatory bodies in framing the developmental 28

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strategies of financial institutions, especially in India. He said the regulators were the most vital and evident contributors in the development of the financial sector.

Emphasising on the rising significance of MFIs in the country and explaining their contribution towards the uplift ment of the underbanked segments of the society, Sudhir Sinha, Chief Executive Officer, Uttar Pradesh Microfinance Association, said, “MFIs are not just serving the lending demands of the remotest segments of the society, they are also generating a lot of scope for employment across the country.”

The conclave witnessed several insightful panel discussions on topics namely: ’Modifying Credit & Liquidity Risk Framework of NBFCs & The Role of Regulatory Bodies’, ‘New Enterprise Technologies that NBFCs would Like to Embrace Next Year’, ‘Technology and its Importance in Curbing Fraudster Attacks in NBFCs’, ‘Rising Significance of Digital Lending: Challenges & Opportunities’ and ‘Growing Role of CISOs in NBFC Sector’.

While Experian India was Analytics Partner, FinBox was the Alternative Data & AI Partner of the summit. Singzy and Tata Tele Services were the exhibitors and NexMoney was the branding partner.

The summit concluded with a felicitation ceremony where leaders and emerging faces across the BFSI sector were recognised for their exemplary contribution. [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector

CONFERENCE REPORT Inaugural Session – Non Banking Financial Company: Key to a New Dawn for Financial Inclusion Endeavour

India is different and so are the challenges faced by the NBFCs here. In tough times, there is a need to reflect speculate and think beyond. We have to find out our own way in India to deal with the challenges in the NBFC sector rather than getting panicked by the newspapers which generally highlight scams and draw conclusions based on the experience of the West.

NBFCs and Microfinance Institutions (MFIs) over the years have undergone a lot of hardships. This is how NBFCs-MFIs in India are now emerging as one of the leading lending institutions.

This transition was possible due to adherence to the vital guidelines initiated by the Reserve Bank of India. Regulators and the recommendations issued by them have pushed the due growth of MFIs as lending institutions.

P SATISH

DR AMITABH RAJAN

Executive Director, Sa-Dhan

Chairman, Reserve Bank of India Services Board

MFIs are gaining a lot of popularity in India and contributing towards the upliftment of the underbanked segments of the society. MFIs are not just serving the lending demands of the remotest segments of the society, they are also generating a lot of scope for employment across the country.

When we are talking about NBFCs, it is also important to talk about the role of regulatory bodies in framing the developmental strategies of financial institutions, especially in India. Regulators are the most vital and evident contributors to the development of the sector. Regulation and development both go hand-in-hand and are significant for the growth of any sector. It is a necessity in case of financial institutions.

RAMAN AGGARWAL

SUDHIR SINHA

Chairman, Finance Industry Development Council

Chief Executive Officer, Uttar Pradesh Microfinance Association

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CONFERENCE REPORT Technology Presentation - The Changing Face of Consumer Lending

Reshaping customer experience through data and innovation, Combining the power of alternate data for decision making, quick thinking and agile implementation driven new ways of decision making are some of the ways to ensure meaningful customer engagement.

DEVANG SHAH

General Manager, Credit Services & Analytics, Experian

CEOs Panel Discussion -- Modifying Credit & Liquidity Risk Framework of NBFCs, MFIs & Housing Finance Companies and the Role of Regulatory Bodies

Observing the current scenario in and around the NBFC and MFI sector, it is evident that challenging times have approached the industry and a lot has to be discussed and planned pertaining to the modification of credit and liquidity risk framework. It is also significant for the regulatory bodies to design a framework in fixing the existing challenges in the sector.

RAKESH DUBEY

Chief Executive Officer, SV Creditline Ltd

Unlike NBFCs, Housing Finance Institutions have a social cause attached to their operations. We are helping people to own a house and fulfil their dreams. The Government also supports this cause and has promoted the idea of affordable housing through its flagship scheme ‘Housing for All by 2020’.

AMIT SHARMA

Chief Executive Officer, Satin Housing Finance

I acknowledge the fact that a crisis has occurred due to IL&FS fiasco, but I also believe that IL&FS does not represent the entire NBFC and MFI sector. The problem that the company faced was due to its own practices and decisions. The firm was into roads, infrastructure and so on and their project decisions were made for three to five years which later extended for lengthier period which created a problem for them.

SUNIL GUPTA

Chief Executive Officer, ManiBhavnam Home Finance

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The liquidity scenario for the entire NBFC sector has flipped completely post IL&FS incident. Prior to this discrepancy, we were in an advanced level of talks with the banks and growth across the NBFC sector was extremely healthy. But now we suffer from a huge crunch of liquidity.

Few months ago when we started our operations as a start-up, ample amount of funds were available for us. Just after the IL&FS incident, the entire liquidity scenario changed across the NBFC sector. The market became tough for all of us. The regulator played a significant role in this adverse scenario by injecting funds into NBFCs and helping them out.

V G SUCHINDRAN

SANJEEV YADAV

Chief Financial Officer, Veritas Finance

Managing Director, Subhlakshmi Finance Pvt Ltd

At a time when everyone is talking about the default made by IL&FS, I believe that the entire NBFC and MFI sector is in good shape and the word liquidity risk is a bit overplayed. Chocking liquidity is a bigger factor for the sector than the credit released.

Samunnati is a specialised Agri Value Chain enabler that provides innovative and customised financial and non-financial solutions.

It leverages the social capital and trade capital in buye-seller relationships via Samunnati Aggregators (SA), through nontraditional sourcing, risk assessment and mitigation, aided by cutting-edge technology, thereby building a quality business that is sustainable and results in inclusive growth.

HARI RAJAGOPAL

PARDHASARADHI RALLABANDI

Vice President, Capital Markets & Strategic Partnerships, Samunnati

Chief Risk Officer, Northern Arc Capital

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CONFERENCE REPORT Panel Discussion - New Enterprise Technologies that NBFCs, MFIs & HFCs would Like to Embrace Next Year

In a digital era, operations of NBFCs primarily rely on two aspects. Firstly, an NBFC would definitely want the investment it had made to return and secondly, customer acquisition, which plays a pivotal role in the operations. It is very significant for NBFCs to deploy a technology that supports them in Returnon-Investment (ROI) and customer acquisition.

NAFEES AHMED

Chief Information Officer, Indiabulls Group

We, at Satin, have started our journey with RFP. The RFP concerns evaluation of three products but we decided to evaluate six products. We planned to evaluate two products each for Tier-1, Tier-2 and Tier-3 respectively. For products pertaining to Tier-3, we took eight weeks to complete our evaluation. This was done to find out what’s fit for all our business needs.

SANJAY MAHAJAN

Chief Information Officer, Satin Creditcare Network Ltd.

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Rural Electrification Corporation Ltd started its operations in 1969 and this year we are going to celebrate its 50th operational anniversary. Our staff is associated with us for a long time and don’t primarily belong to the younger generations.

Till 1990s, IT innovations across the government sector was not very prevalent. Tech-innovations at REC started off very late, around 2007.

P K MUKHOPADHYAY

GM-IT & Chief Technology Officer, Rural Electrification Corporation Ltd.

Offering loan in 59 minutes, an initiative started by the government, is not a challenge for us as we were already working on this aspect. In alignment with this, we have already launched our stag which is working efficiently. NBFC and MFI segment is full of opportunities and there is a lot of scope for expansion. There is opportunity to automate and make things efficient.

ASHISH GOPAL SAXENA Chief Technology Officer, UGRO Capital

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When we were GE Money, technology was handled at enterprise level. Specific detailing of country-based customisation was not done. But the shift from GE Money to Clix Capital expanded our profile and we became a multi-product company. It brought-in several new challenges. The first challenge was to set-up a platform that can cater to the needs of all the products.

We are not a very old institution on the block but we have been growing really fast on the back of technology. We have challenged some of the traditional thoughts pertaining to settingup of branch offices. We have only one office per state and all our field officers are equipped with mobile devices. Our moto is to deploy tech-driven measures to boost the operations and streamline the services.

ANAND AGGARWAL

NEETI WAHI

Head-IT, Kisan Rural Finance

VP & Chief Information Officer, Clix Capital

We are a start-up and therefore we face a lot of challenges associated with investments, operations, team building and technology deployments. Out of all these, implementation of technology plays a pivotal role here, keeping the current banking scenario in mind. Every technology deployment is different and it has its own set of challenges in terms of its fitment with various modules.

PARAS MITTAL

Managing Director, Gurdevi Leasing & Finance

Panel Discussion – Technology and its Importance in Curbing Fraudster Attacks in Non-Banking Sector

In rural India, customers want the services to be simple with proper reach and speed. They want technology to reach the last-mile and solve the challenges faced. In my view, analytics and all new techniques and technologies should focus on serving the rural customers and providing the relevant banking services to them.

SURESH A SHAN

Head-Innovation & Future Technology, Mahindra Finance

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There are two types of frauds that we come across in NBFCs, some occur internally while others come from external sources.

During acquisition of clients, we observed that fake Know Your Customer (KYC) documents are used by the clients that ultimately leads to fraudulent activities. Similarly, in terms of internal cases, we have witnessed that employees with the help of clients or sometimes due to carelessness give rise to frauds.

BIPIN SHARMA

Chief Financial Officer, Subhlakshmi Finance Pvt Ltd

There should be a proper coordination between Business Intelligence (BI) tools and advanced analytics. Lack of coordination between these two can increase the cost and reduce efficiency among the banking and finance institutions because both these techniques are completely different and we are putting them together to function in alignment.

VENU KUMAR PANJARLA

CAVP-Technology, Margdarshak Financial Services Ltd

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KYC has been a long journey, starting from the mechanism from where banks used to ask for a reference of a person who holds an account in the same bank/branch to an era where banking and financial institutions started verifying a customer’s identity on the basis of a government issued identity cards.

Aadhaar has played a major role in revolutionising this segment and bringing e-KYC into life.

VARUN GULIANI

Head-IT, India Shelter Housing Finance

One of the biggest challenges that we face in rural areas within the affordable housing segment is the verification of KYC. To verify the physically filled details in our digital system we need an OTP that gets generated and received at the customer’s registered mobile number but due to lack of digital awareness we fail to receive a response within 30 seconds and it expires by the time customer responds.

DOMINIC VIJAY KUMAR

DVP & Head-IT, ART Housing Finance Ltd

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I have witnessed the transition of Indian banking system from traditional methods to tech-driven techniques. Blaming technology for the rise of frauds is incorrect because menace of fraudulent activities were a part of the banking sector during traditional era as well and it continues to maintain its momentum now as well. Frauds sustain but the modus operandi changes.

DURGESHWAR MISHRA

Head-Innovation & Future Technology, Mahindra Finance

CEOs Panel Discussion – Rising Significance of Digital Lending: Challenges & Opportunities

Fintech is a new word for the BFSI sector. The way infrastructure of the company has changed in the last one-anda-half-year, both the words fin and tech are struggling to make a mark. The verdict on Aadhaar by the Supreme Court of India and the IL&FS issue has brought the entire sector of NBFCs and Micro finance into a fix. It is the right time and opportunity for all of us to learn.

Microfinance Institutions being the traditional players play a very significant role in reaching out to the customers. When compared to the Fintech world, service delivery by MFIs is completely different. The biggest challenge faced by the lending industry is the recovery of loans. However, I believe MFIs have handled loan recovery really well as compared to its other counterparts.

AMIT JHANVAR

VIVEK TIWARI

Vice President, Unitus Capital Pvt Ltd

Managing Director, Satya MicroCapital Ltd

We, at Prayatna Microfinance Ltd, paid attention to the role of technology way before we rolled out our operations. We understood that digitisation in terms of collections and disbursement does not play a very significant right now for a microfinance company. We have our software which is provided to each and every field officer. This helps us in digitising our services.

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Chief Executive Officer, Prayatna Microfinance Ltd Connect with us on

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When we talk about financial inclusion, we don’t really talk about transforming lives. There had been a lot of developments in this segment and a lot of people can now avail a lot of branchless services around the country. But despite this, we need to ensure economic inclusion. We need to start a Microfinance programme based on the economic inclusion.

SATYAVIR CHAKRAPANI

MD & CEO, Shikhar Microfinance Pvt Ltd

Digital platform in terms of lending is a commodity today. You can make it in-house or you can get it developed by a third party. The value here comes from the additional components that you put. The first component is being able to create loan syndication in micro markets. This scenario does not exist as of now.

PUNEET GUPTA

Managing Director, Simplified FinTech

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We are a peer-to-peer lending platform. i2iFunding is a platform where borrowers can apply and on the other side we have individual lenders who come and fund those loans once they are approved. When we started our journey, only the loan application process undertaken by the borrower was digital but the credit evaluation was done using the traditional methods.

VAIBHAV PANDEY Co-Founder, i2iFunding

Revfin is a digital consumer lending firm and our core objective is Financial Inclusion. We primarily lend for clean technologies.

Within clean technologies, one of the segments that we have is electric rickshaw finance. For serving this particular segment, we face a lot of challenges. For instance, these customers do not belong to the formal market and not necessarily have documents pertaining to e-Know Your Customer (e-KYC).

SAMEER AGGARWAL Founder & CEO, Revfin

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PrestLoans is a digital lender based out of Delhi. We service very small businesses and the micro segment of MSMEs. More or less our entire process is digitalised, be it sourcing or application from the client, credit process. We give weightage to known financial parameters, which include the customer’s personal information that we analyse to rank them accordingly. . It also comprises social and business information.

The number of transactions being made in the microfinance sector by the very virtue of the fact that you are addressing the bottom of the pyramid which suggests that there are several opportunities to use Machine Learning to come down to a decision pertaining to the client’s credit worthiness and whether the lender should go ahead with the underwriting or not.

ASHOK MITTAL

YASHWARDHAN SAHAI

Chief Executive Officer, Prest Loans

Chairman & Managing Director, Ajivika Finance Ltd

Felicitation Ceremony

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INDUSTRY PERSPECTIVE

RHF REDUCES THE TIME

of home loan sanction to 7 minutes using Digital Lending Platform India being a cost-sensitive market the two factors that play a major role while availing home loan are Rate of Interest (ROI) and how soon the loan can be disbursed, says Kunal Dikshit, CTO, Reliance Home Finance Ltd, in conversation with Elets News Network (ENN) • •

•

KUNAL DIKSHIT CTO, Reliance Home Finance Ltd

How significant is the role of a Chief Technology Officer (CTO) in a financial institution as compared to other C-Suite officers?

A CTO’s role is constantly evolving in today’s world. Long gone are the days when technology used to be a support function. Technology is now working in close coordination with businesses and driving growth with well-defined responsibilities of ensuring Return on Investment (ROI) on the investment made.

The responsibility of a CTO includes: • Identifying the right technology components to enable business revenue growth and fulfill company needs.

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Information and data security.

Adhering to regulator and compliance requirements. For eample, Reliance Home Finance (RHF) is governed by NHB guidelines.

Responsible for preparing technology roadmap

The profile allows the CTO to act as a trusted advisor to CEO and align the company goals to the strategic technology initiatives. It’s the CTO’s responsibility to evaluate the new technology initiatives and its impact on the company. The role gives one the authority to decide on new products to be used along with the budgetary decisions. It’s the CTO’s responsibility that technology function comes to the forefront and enables the business to fulfill the company’s objectives, thus ensuring a much more intelligent organisation.

Home finance is a popular segment and in India, it caters to a large section of people. What measures do you take to enable digital engagement with your client base?

India being a cost-sensitive market the two factors that play a major role while availing home loan are rate of interest (ROI) and how soon the loan can be disbursed. Technology and innovation are playing a key role in fulfilling the aspirations of a large number of Indians wanting access to credit and being a

financial services provider. At Reliance Home Finance, we make it our prime duty to understand the consumer’s perspective and needs.

Reliance Home Finance’s digital lending platform has drastically reduced the turnaround time in home loan sanction from 4-5 days to 7 minutes. This has helped in better customer service and satisfaction index and has also taken the brand to newer heights. Further, we have a state-of-the-art website which is user-friendly as it enables customers to understand the loan products in a simpler manner. All efforts are carried out via a call centre, branch network, SMS and emails to make our customers more aware of our digital offerings.

In a country that is still chasing Financial inclusion, how can you ensure housing for all and easy loan access?

As per industry reports, there was a shortage of close to 2 crore housing units over the period 2012–17. Of these, the housing for economically weaker section alone accounted for more than 50 percent. Pradhan Mantri Awas Yojana (PMAY) is a promising scheme which is expected to solve the housing shortage in the country. More than 65 lakh houses have been approved so far for construction under the PMAY (U).

The government is on course to sanction one crore houses well before

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c) Technology is also integrating “WhatsApp” for business for communicating with the customers. d) Digital lending platform has been developed and RHF aims to sanction a home loan within 7 minutes.

The customer has an option to either use his Aadhaar number or PAN and system is integrated with third-party entities and tools like the bureau, deduplication engine, and statement analyser to instantly calculate the creditworthiness of the customer and generate the sanction letter which then gets mailed to the registered mail ID.

2020 to ensure that construction activities are completed to provide housing for a larger section of the society by 2022. Reliance Home Finance has an important role to play in realising the target of this scheme and is working overtime to ensure that every Indian gets his/her dream house. Our focus is clearly on the “affordable housing” segment and this has become a win-win situation for all parties concerned the economically weaker section of the society, the government, and RHF. Tell us about the new technology deployments in the company.

Technology no longer is just an enabler but has become the “driver” of the business initiatives, thereby ensuring increased revenues or reduced cost by improving efficiencies. Focus on digital initiatives ensures better end customer experience by ensuring ease of doing business. Systems are in place to assist the internal workforce to seamlessly close deals and provide the best support to the customers. Following initiatives have been undertaken by us in terms of technology: a) Robotic Process Automation (RPA) is covering the automation of updating ‘Pending Customer Documents’ in the loan lifecycle. The RPA BOT does a maker-checker and uploads the details and updates status of the documents received in the core loan management system, basis excel inputs prepared by the operations department. Improvement of the process in terms of notifications/ reminders is also in the plan. Secondly, the automation of the ‘Purchase Order Generation’ process and auto execution of mail to the respective vendor.

Another area in which we see the value has been added is the automation of the ‘Customer Issue / Feedback’ process.

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e)The mobile app is used by both feeton-street (for instant credit decisioning and sourcing) and collections field force (for payment collection).

How has been 2019 for the company so far? What can we expect to see?

The year 2019 has no doubt been challenging with the general liquidity crunch in the market and the slow credit offtake due to rising interest.

We at RHF firmly believe that this is a temporary blip and things should stabilise sooner rather than later. Completion of events like the General Elections would also play a big role in improving the general sentiments in the market.

allocated to the team and recorded in the system and an incident number is generated. The auto-reply is sent back to the customer along with the incident details. b) Models are getting more and more developed with the availability of data and are getting used in not only helping us in customer acquisition but also reducing the delinquency levels.

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New offerings that one can hope to be delivered is the launch of Artificial Intelligence/Machine Learning-based chatbots which would be more next-gen as compared to most of the current ones which are mostly glorified Interactive Voice Responses (IVRs).

Chatbots would be able to handle the local language-based questions and be intelligent enough to help the customer to fill up the loan disbursal form. Automation of most of the repetitive mundane tasks is also very high on the agenda.  May - June 2019

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POLICYMAKER’S PERSPECTIVE

ANDHRA PRADESH

Using IT for Last Mile Delivery of Government Services Andhra Pradesh has been ahead of other states when it comes to IT technology. The PDS system in the state has become accessible to most of the people because of the technology reaching to one and all, says Peeyush Kumar, Secretary, Finance, Government of Andhra Pradesh, in an Interview with Arpit Gupta of Elets News Network (ENN). do in the CFMS. In CFMS, what we have done is that we have made all the departments as user groups, both for the budgeting exercise and for the payments, on a single platform. So, all the DDOs and the account officers are also on the main system. For Direct Benefit Transfer also it is integrated using the MPCI system, then linking with the PFMS and linking with E-kuber of the RBI. It is a comprehensive financial solution.

PEEYUSH KUMAR Secretary, Finance Government of Andhra Pradesh

What is the Comprehensive Financial Management System (CFMS) and how is it helping the Government of Andhra Pradesh in data visualisation?

The Comprehensive Finance Management System is an end-to-end IT solution for all finance approvals starting from the budget sanction to the budget release order to actual utilisation to the payment of bill system.

Many states have their own integrated finance systems but those are not as comprehensive as CFMS. They are not end-to-end in the manner in which Andhra Pradesh has designed CFMS. Government of India also has the Public Finance Management System (PFMS) but that too falls short of what we can 42

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What efforts have been initiated to improve tax collection in the state?

A tax collection system usually depends on the drive and larger the tax base and compliance the better it is. With Government of India introducing GST, the entire effort has been to provide IT platform to various businesses to file their Returns. At each stage all the billing systems are getting automated. Andhra Pradesh has been ahead from other states since the initial stage itself. In the last 20 years, we have taken a lead in IT, so we were in better position to implement the Government of India’s initiatives in so far as GST is concerned. Besides that we have also integrated other things like Excise with the IT—thanks to the CFMS. So, now all tax collection is directly coming to the treasury due to this end-to-end solution.

Andhra Pradesh saved Rs 2,585 crores through Aadhaar seeding in PDS.

How did you deploy the technology to prevent leakages?

Government of India started streamlining PDS on the IT system from 2015 onwards, but Andhra Pradesh achieved this much earlier.

Somewhere around 2010, we had the first generation of IT system in the PDS and in the last five years we have improved it. In 2015, when Government of India introduced its PDS system, we were the first to adopt it. The solution is very comprehensive and well designed. What we did is that in the initial phase itself we created the SRDH database. At one point of time when our system was coming up there was a facility of State Resident Data Hub, and based on the SRDH database we could integrate all the ration cards with the Aadhaar number.

So, while many states were struggling to do that because of the problem of mismatch, in Andhra Pradesh because of the comprehensive survey we had done in the field in which we had captured almost 95 percent of the population covered under PDS, we could capture the databases and the number of units which are there. In fact, new cards are also being created through the online system where the application is submitted and verification is done.

Based on the verification report, new cards are generated on the system then

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the phone number of each card holder is integrated so that they can receive text messages when the ration is available at PDS shops.

Through the e-PoS devices we have achieved a high success rate as the quality of Internet connection and the equipment is very good. Where we face the biometric verification problem, we have introduced an alternate system. So, the entire release of the ration is done through the IT system.

In some exceptional cases where there is a single woman, destitute lady or an old woman who is not able to come to the PDS centre to collect ration we have deployed self-help groups to help them. Andhra Pradesh has a very strong network of women self-help groups who are very active in the field and we have trained them to use the technology.

Through the e-PoS devices, we are able to reach to the last mile. Our exception mechanism is also very strong that ensures that we reach out to the people.

The success rate is over 99 percent with few exceptions. We don’t have any place in the state where the manual PDS system has been resorted. The integration of the system with biometrics ensures that the ration reaches to the right person in a timely manner.

Earlier when the manual system was in place, if somebody would not collect the ration it would normally be reported as collected. The new system ensured savings that we could upload into the system and that’s how we were able to save Rs. 2,400 crores.

The State has utilised 72.4 percent of total budget on developmental programmes. What are the major areas of investments?

After bifurcation of Andhra Pradesh, despite all the progress we have made there is a lot of scope for work on parameters like education, infant mortality rate, and health. Of course, relatively the per capita spending or social parameters in North India Connect with us on

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might be good but within the South Indian states Andhra Pradesh has a lot to achieve. Therefore, we have been focusing on developmental work especially in the health and education sector where we have been using IT. We provide comprehensive help to the deserving people under concepts like cradle-to-grave, which covers people from early childhood to education to health and jobs through IT interventions. That’s why our expenditure on developmental programmes is on the higher side.

What measures have you taken to improve debt management in the state?

After bifurcation of Andhra Pradesh, we have been running revenue deficit budget for the last three to four years because of the liabilities we have taken from the erstwhile combined Andhra Pradesh. This is an area of concern and we have been focusing on it. One of the major decisions has been the shift towards the open market borrowings. So, we have reduced the small savings or the high cost debt and we have been trying to replace it with the lower cost debt.

Our proportion of the market borrowing or open market borrowing has been increasing and also from the stock of debt we have been replacing some of The Banking and Finance Post

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the expensive debts and replacing them with lower cost debts. We are making a deliberate attempt to move towards (i) open market borrowing and (ii) to replace the high cost debt with the low cost debts. Active swapping and repaying the debts are the instruments we are using.

Tell us about the future plans of the state?

Andhra Pradesh being a new state, we have lost Hyderabad which was earlier a major attraction for service sector. On agricultural front we are doing well with focus on irrigation. We have been able to achieve a double digit growth—thanks to the agri sector. But a lot of effort has to be made in the industrial sector and service sector as well.

We are developing the Amravati town, not only as a capital city but also as a major IT hub to attract investments and people in the service sector. Apart from that, Vizag can be an industrial corridor because we have a long coastline. We are trying to develop different coastlines so that industrial hubs can connect the northern part of the coastal Andhra to the southern part. We are also working on developing some industrial pockets like in Vizag area where we are looking to develop pharmaceutical sector and med-tech zones.  May - June 2019

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INDUSTRY PERSPECTIVE

DIGITAL MEDIA HELPS

in delivering targeted outcomes Digital media offers a powerful and dynamic platform to engage with the target audience in quickest and responsive manner. Using digital platform, it is possible to reach out directly to the general public and to deliver targeted outcomes, says P K Mukhopadhyay, GM-IT & Chief Technology Officer, REC Limited, in an interview with Elets News Network (ENN).

P K MUKHOPADHYAY GM-IT & Chief Technology Officer, REC Ltd.

How technology plays a vital role in your organisation, especially when you are dealing with rural India?

REC Ltd (formerly Rural Electrification Corporation Limited), a premier financial institution in power sector under the aegis of Ministry of Power, the nodal agency for implementation of various flagship programs of the Government of India, i.e, Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), Power For All (PFA), National Electricity Fund (NEF), among others.

All these schemes act as a catalyst in uplifting the quality of rural life by providing them access to electricity.

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May - June 2019

To accomplish the Grameen Vidyutikaran mission of electrifying 18,452 un-electrified villages before the timeline along with transparency and accountability, a monitoring mechanism --Grameen Vidyutikaran (GARV)-- has been set-up.

Application’-- was also developed wherein all the detail of a consumer such as photo of beneficiary, photo copies of identity proof, address proof, etc., were captured to provide on the spot electricity connection under Saubhagya scheme.

The mission has brought transparency in implementation of a government program and has empowered the agencies involved in disseminating real-time information to the general public through the GARV mobile app.

How social media and other digital platform helps in promoting rural electrification projects across India?

Digital media offers a powerful and dynamic platform to engage with the target audience in quickest and responsive manner. Using digital platform, it is possible to reach out directly to the general public and to deliver targeted outcomes. A similar model is being followed by REC in its ‘Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya)’. With social media as an active component of the overall strategy: every effort, every challenge and every progress are being reported with utmost accuracy.

Similarly, to achieve the target of electrifying 2.63 crore households in a transparent manner, the Saubhagya web-portal/app was developed. For maintaining the sanctity of data, billing data of Distribution Company (DISCOMS) was integrated with Saubhagya portal/app so that the consumer progress gets updated automatically when new consumer was created in the Discoms/state billing data.

Subsequently, an important functionality-- ‘New Consumer

Using Twitter and Facebook, the mission was able to get to ground zero and fetch reports from the grassroot

A number of initiatives have been taken by Government of India to improve the power related services in India, right from off-grid Decentralised Distributed Generation (DDG) system, establishing green energy, reducing fossil fuel-based generation, etc. [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector

INDUSTRY PERSPECTIVE

level in the form of people tweeting and posting their issues on-line. It is a platform for the public to participate in the development of those parts of country which have been left far behind by tracking the status of works and to expedite the process through micro-management at various levels. The social media interaction comprising of feedbacks, queries and grievances have been addressed and best possible solutions have been provided.

Give us an overview of the new products and services you are working on currently?

A number of initiatives have been taken by Government of India to improve the power related services in India, right from off-grid Decentralised Distributed Generation (DDG) system, establishing green energy, reducing fossil fuel-based Connect with us on

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generation, etc. India has been a pioneering and founding member of International Solar Energy Alliance (ISA) and has been playing an active role in promoting renewable nonconventional energy production.

How challenging is it to deliver digital services in rural India?

The objective of the ‘Saubhagya’ is to provide electricity to all remaining un-electrified house-holds in rural as well as urban areas. To achieve universal household electrification in the country.

Saubhagya reaches to approximately 2.63 crore households (approx. 13.15 crore people) across the country. It means covering population of the size of Philippines or Egypt.

The major challenge was integration of Saubhagya portal with states billing software. After the integration, Saubhagya app maintains the records The Banking and Finance Post

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of approx. 2.63 crore recently electrified consumer detail such as consumer Number and name, village, census code, meter number, date of connection, above poverty line (APL)/ below poverty line (BPL), Rural/Urban and Mobile number etc. It has reduced the administrative delays and enhanced the transparency in the electrification process.

What are the innovations concerned with technology, you are planning to deploy by 2020?

Few of the areas which are being pushed as major technical reform are reduction of Aggregate Technical and Commercial (AT & C) losses, introduction of smart metering, modernization of transformer, feeder segregation to provide required quality of services to various segments of power consumption, Computerized Automated Billing Systems etc.  May - June 2019

45

INDUSTRY SPEAKS

3 CURRENCIES

That Will Surprise Investors

T

he financial market has witnessed dramatic events in the first quarter of 2019. From Investors bidding farewell to some of the major economic relations between the countries because of the aggressive US trade policy, to Teresa May stepping down, after failing to meet the deadline of the UK’s withdrawal from the European Union.

In this article, we are going to take a look at 3 major world currencies, which should surprise investors this year, as well as consider possible options for their movement.

Let us have a some of these information that can help the investors to gain a foothold in the market, along with the making some good earnings.

The Euro: A Gap with History If any of you is engaged in quantitative trading, which implies to the study of a huge amount of different data, you might be interested to have a look at some of the lags in the dynamics of the volatility of the EUR/USD currency pair from the previous year statistics.

We have analyzed every first quarter since 2000. As a result, we have found out that the euro has shown the lowest activity from January to March 2019. The quarterly fluctuation was only 3.97% against the average reading of 9.02%.

For this reason, a gap in the activity of traders can be used as an independent strategy for trading the euro, but only by those traders who know how to wait.

And there is a question about the future direction of the trend. To find the answer to this, we can refer to average closing prices for the last 200 and 365 weeks. Both of them indicate that the euro is under the power of bears; therefore, various experts can talk about the prospect of a decline of the EUR/ USD pair to 1.0500-1.0600.

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May - June 2019

The Yen: The Guarantee of Low Rates The Japanese yen may also surprise traders.

The reason is a slowdown in the economy, which is confirmed by the low inflation.

Haruka Kuroda, the head of the Bank of Japan, set a 2% target inflation in 2013, but since then the ministry has failed to achieve it. There is also a little change in other important indicators, and the country’s annual GDP that has rarely exceeded by 0.5%.

To slightly influence the situation and boost inflation, the authorities took up an interesting step of a verbal intervention.

BOJ’s Executive Director of international affairs, Eiji Maeda has already mentioned various incentive measures. One of them includes the possibility of using the printing press.

The range of movement of the USD / JPY chart is gradually narrowing. Traders can see a technical analysis “triangle” pattern, which signals the continuation of the trend.

The British Pound: Brexit Currency traders reacted unfavorably to the fact that the UK did not leave the EU on March 29. The lawmakers did not like the draft agreement, prepared by Prime Minister

Theresa May, and rejected it several times, despite the adjustments that had been made.

Now Britain is at the crossroads again. It is possible that the country will leave the European Union without a cooperation agreement or only with a partial version of the regulation of future relationship.

In turn, the people living in the UK are also tired of the uncertainty, and many of them will like the second referendum, which will reverse the course of the country. We are waiting for the answers to these questions in the next 2 months.

The tight deadlines and the importance of what is happening can both bring the British currency down to new lows and bring it closer to the global average, that is, above 1.5000 against the US dollar.

Each of the ideas mentioned above you can implement when working on the Olymp Trade trading platform. Thousands of traders have already chosen the company for its unique services, free training and reliability, confirmed by the FinaCom financial commission.

(Views expressed here are personal opinion of the Olymp Trade) 

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'PEGA's CASE MANAGEMENT maximises efficiency of banks'

With Pegasystems, you gain a transformational approach to case management that allows you to manage cases holistically.

We provide support for all of the work that needs to be done, says Suman Reddy Eadunuri, MD, Pegasystems, in conversation with Sudheer Goutham of Elets News Network (ENN). is to ensure that they have adequate technology to enforce use of various methods by organisations to safeguard themselves.

SUMAN REDDY EADUNURI MD, Pegasystems

Are the banking, regulatory & financial monitoring sectors using enough technology to keep the industry on a growth path?

Technology is growing at a brisk pace and it will be hard for any regulatory body whether in India or across the globe to have enough expertise at any given point in time to monitor them effectively.

The rapid evolution of technology and their usage in new areas makes it arduous for the regulators to carry out to that level of scrutiny.

I believe regulators need to hold companies accountable for use of technology to limit the cases of fraud and mitigate risks. The job of regulator 48

May - June 2019

As per Reserve Bank of India (RBI) reports, the number of frauds has gone up in recent years. Do you feel the technologies today can help in reducing these numbers?

In the banking sector, it could be a regulatory fraud, individual fraud, organisational fraud or any other risk, it totally depends on how data is being used or stored. There are adequate technologies today in the market to address these issues.

With Pegasystems, you gain a transformational approach to case management that allows you to manage cases holistically. Pega case management system provides support for all kinds of work that need to be done. No matter what type of case management work is needed — structured, unstructured or eventdriven— Pega case management can orchestrate the multiple processes, systems and people required to manage the case and any nested subcases and tasks.

It purely caters to the banking sector to allow them to do their business as usual.

With the strong underling case management processes and the data in the storage and whole

Digital Process Automation (DPA) process that Pegasystems have, we make it extremely compliant for the banks to do their business and at the same time ensuring that they are maintaining all the regulatory compliance. So, we provide all the technologies that allow these banks to secure themselves and yet go for growth.

How can Pega’s blockchain kit help Indian banks? How Pega’s platform and next best action technologies are helping global banks to transform?

We have various pieces of technologies that can be leveraged both on the customer service side, one-to-one marketing side, sales automation side or KYC (Know Your Customer). Across all these sectors, Pegasystems has a proven technology that allows for larger organisations to leverage what’s out of the box, but also build custom processes in rapidly.

We offer a model-driven architecture platform that provides a no-code platform, allowing businesses and IT to come together and rapidly create processes to suit the customer’s banking needs.

Predominantly, our strength has been the combination of our platforms.

When you apply the power of Artifical Intelligence (AI), which is where we have differentiated ourselves by putting in a decision hub that sits at the centre of our entire platforms, allowing real-time

[ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector

INDUSTRY PERSPECTIVE

the future are about how to create the one- to-one connect that allows the banking systems to interact with their end customers.

Applying AI on the personalised data takes you back to one-to-one marketing, one-to-one customer engagement which I feel is extremely crucial because today the customer wants the bank to come to them, and with the proliferation of various digital channels that we use, they don’t want to have a different experience depending on the channels they use.

They want a consistent experience throughout the channels.

Context sensitive personalised services are what customers want in today’s time across all digital channels. monitoring across all the functional silos, such as sales service and marketing.

It’s the core strength and when you apply all the driven architecture, it makes all the deployment easier.

In terms of workflow or adequate financial services, we have a huge risk.

Whether it is on dispute management, KYC side or leveraging of the blockchain, we have provided a test kit.

It especially focuses on the KYC, which potentially could change significantly in the future as it leverages the whole interim blockchain using the smart contracts philosophy. It in-turn reduces the burden of the individual bank to maintain a huge number of systems to ensure data secrecy and privacy, and data authentication on which the banks spend a lot of money.

How technology is going to change the banking sector in the next five years?

We have already seen the direction technology is moving towards. Some technologies have matured in the last couple of years like AI, application of AI on large data sets, etc., to get clear insights that can provide a meaningful recommendation to the end-customers.

So, a huge trend which we are going to Connect with us on

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Today providing one to one personalisation has become extremely important for the large companies to get ahead. Today, all the AI-native industry understands you personally. see in the next two-three years is how you put the customer at the centre of your whole experience.

Today, providing one-to-one, i.e. personalised services has become extremely important for the large companies to get ahead. Today, all the AI-native industry understands you personally.

The huge challenge in front of the banking and financial sector today is how do we get to that space. A lot of technologies like AI, Blockchain will be adopted, but the holistic designs of The Banking and Finance Post

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What does India need to secure enterprise banking deals?

It’s a huge concern across the world and India is also working on a data privacy law that will come into effect hopefully sometime later this year.

The organisations today have a lot of data, including, personal data. Now the concern is how they use that data. There are lots of other ways to use the data in a right and valid way, what we call as transparent AI. We are the first ones in the industry to come up with transparent AI and opaque AI. With opaque AI, depending on who you are, you can make your systems take the right decisions for you in certain cases of banking.

The transparent AI in our system is one that doesn’t allow the deep algorithm to go into the data sets. So we use the transparent AI which uses the decision switch and AI that is traceable.

It is important to trace and audit how certain decisions are made. So from that perspective, it is very important that our software needs to take responsibility for providing a more transparent and meaningful decision-making process so that it is auditable and safe for the organisation as well.  May - June 2019

49

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29 August 2019 , MUMBAI

Introduction This August, get ready to witness a premier confluence that will highlight the latest trends, innovations and deployments made across the Banking, Financial Services and Insurance (BFSI) sector, join the C-Suite officers and explore what the future has in store for the industry.

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Key Focus Areas • Redefining Role of Tech Leaders • Digital Transformation • Role of Regulatory Bodies • Cyber Risk, Security & Management • Data Analytics, Governance, Security & Management • BIg Data, Artificial Intelligence, Machine Learning, IoT and Blockchain • Leveraging Cloud and Datacentre in BFSI Sector • NexGen Banking and Ecosystems • Emerging Role of Digital Officers • Digital Lending: Challenges & Opportunities

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